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‘Take remedial measures now or face consequences’

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Communist Party MP issues dire warning over deteriorating economy

By Shamindra Ferdinando

Communist Party lawmaker Weerasumana Weerasinghe says Sri Lanka, experiencing the worst ever post-independence economic crisis, should take tangible measures to streamline revenue collection mechanisms in line with an overall strategy to fight waste, corruption, irregularities and negligence that had caused irreparable damage to the national economy.

MP Weerasinghe said that the failure on the part of the incumbent government to arrest the situation would be catastrophic.

In an interview with The Island, lawmaker Weerasinghe emphasised the responsibility on the part of the Central Bank, Parliament and the government to take remedial measures or face the consequences.

Matara District MP Weerasinghe is the only CP representative in the 145 member SLPP parliamentary group. The CP’s only other contestant Mahesh Almeida (Colombo District) failed in his bid.

Responding to another query, MP Weerasinghe acknowledged that their CP’s efforts to draw the attention of the top SLPP leadership to urgent economic and fiscal reforms had been largely unsuccessful. Perhaps those in authority lacked political will to make decisive interventions, MP Weerasinghe said. Referring to repeated declarations that the government lacked the wherewithal to grant salary increase to striking principals and teachers, lawmaker Weerasinghe said that the government owed an explanation as regards the rapidly deteriorating financial situation.

“I have raised the issues at hand in Parliament and the government parliamentary group meeting as well as on special occasions when we were given an opportunity to express views. However, the government group seems reluctant to recognise the pathetic situation the country is in,” lawmaker Weerasinghe said.

The MP said that the SLPP acted contrary to the pledge to accommodate Dr. G. Weerasinghe on its National List following the last general election in Aug. 2020. Subsequently, Dr. Weerasinghe succeeded CP General Secretary Dew Gunasekera. Of the 29 National List slots, the SLPP won 17. Of the SLPP constituents, the SLFP and NFF received a National List slot each.

“The undeniable truth is our economy is in tatters. Those who blame the developing crisis solely on Covid-19 are deceiving the public. If successive governments followed prudent economic policies, Sri Lanka could have faced the global epidemic in a much better way,” MP Weerasinghe said.

The first time entrant into parliamentary politics, MP Weerasinghe said that as a member of the COPA (Committee on Public Accounts) he realised how corruption steadily eroded public finance. COPA proceedings presented a frightening picture and underscored the failure on the part of the Parliament to at least curb corruption.

MP Weerasinghe said that if COPA proceedings were examined together with COPE (Committee on Public Enterprises) and COPF (Committee on Public Finance), they would reveal the ruination of the public sector. Regardless of change of governments, the deterioration continued unabated and the country was on the brink of economic collapse, lawmaker Weerasinghe said.

Lawmaker Weerasinghe warned that when a government failed to manage an economic crisis it would be transformed into social crisis/unrest. Therefore, the government and the Central Bank should act in unison, without further delay to prevent chaos. “We are on the verge of social unrest,” MP Weerasinghe said, urging the top political leadership to keep in their mind that the Central Bank should reflect the national economy.

Referring to COPA proceedings and reports, lawmaker Weerasinghe pointed out how the revenue collection mechanism comprising the Customs, Inland Revenue and the Excise Department failed to achieve basic objectives. Asked whether he addressed this particular issue in parliament, MP Weerasinghe said that he questioned the status of the revenue collection apparatus at the recent debate on the Central Bank’s 2020 report.

Lawmaker Weerasinghe has told Parliament that the three institutions were among most corrupt setups in the country. The CP representative pointed out though President Gotabaya Rajapaksa in Feb 2020 appointed a retired Major General Vijitha Ravipriya as the Director General, Customs, however the institution remained the same. MP Weerasinghe stressed that the entire revenue collection apparatus should be overhauled if the political leadership was seriously concerned about sharp drop in government revenue.

MP Weerasinghe said that there was absolutely no point in denying the fact that the revenue collection system deliberately caused situations that deprived the government of due taxes. The entire system was geared to assist those trying to exploit the methods in place to collect taxes, MP Weerasinghe said.

The MP also questioned the rationale in the Customs obtaining sizable part of government revenue for the benefit of Customs personnel. Reference was also made to longstanding legal battle between the Customs and the Sri Lanka Ports Authority (SLPA) as MP Weerasinghe underscored the absurdity in one state institution moving court against another.

Commenting on the abolition of a range of taxes in Dec 2019, MP Weerasinghe said the government should re-consider that decision as obviously the public didn’t receive the benefits. The CP MP said that decision caused massive setback to the government whereas some big companies benefited.

The Treasury lost well over Rs. 500 bn due to abolition of a range of taxes, including PAYE (Pay As You Earn), NBT (Nation Building Tax), Withholding Tax, Capital Gain Tax imposed on the Colombo Stock Exchange, Bank Debit Tax and unprecedented reduction of VAT (Value Added Tax).

The MP said that the 15% VAT and the 2% NBT which amounted to 17% imposed on all goods and services were unified and reduced to 8%, effective from the first of December 2019.

That fatal decision has been taken at the first Cabinet meeting of the incumbent government held on Nov 27, 2019.

MP Weerasinghe acknowledged that the Opposition had raised this issue both in and outside Parliament.

The CP man said that the government should explore the possibility of recovering at least a significant part of massive profits earned by selected companies. This issue could be addressed in Budget 2022, MP Weerasinghe said, urging the government to introduce a national policy in respect of taxes and duties.

MP Weerasinghe said that stability couldn’t be achieved through political maneuvering. “Government’s near two-thirds majority in Parliament and the passage of 20th Amendment with over two-thirds in last Oct do not mean reflect in the public mood,” MP Weerasinghe said.

Commending Sri Lanka’s decision not to seek IMF intervention, MP Weerasinghe said that tax amnesties would never achieve the desired results. Unfortunately, successive governments prescribed same remedies, the MP said, the need for tax policy beneficial to all was the need of the hour. “Direct taxes are probably about 10 percent and indirect taxes 90 percent. Ideally, it should be direct taxes 65 % and indirect taxes 35 %. Our continuing failure to address this issue is an affront on the public.”

Lawmaker Weerasinghe faulted the media for giving time and space for those who engaged in cheap politics. The situation was so bad the government revenue was probably now zero of the Gross Domestic Product (GDP) though it was down to 9 percent in 2019. At the time of Dr. N.M. Perera’s tenure as the Finance Minister, the government revenue had been 24 percent of the GDP. According to the MP, one of the primary reasons for the crisis and overall chaotic situation was the wide gap in direct and indirect tax.

MP Weerasinghe said that the government should encourage the public to save money. Perhaps, the government should bring in laws to ensure all students have savings accounts, the MP said, urging the Central Bank to apprise the entire banking sector. “The National Savings Bank was set up to encourage savings. Today, it is just another commercial bank. People’s Bank was meant to spur development. Now, it is too another commercial bank. Let us take meaningful measures to overhaul the national economy. That wouldn’t be possible unless the banking sector was subjected to scrutiny.”

The CP spokesperson said that in spite of repeated promises in the run-up to the Presidential and Parliamentary elections, the government was yet to punish those responsible for Treasury bond scams perpetrated in Feb 2015 and March 2016. Those who represented the UNP at the time of Treasury bond scams now as members of the Samagi Jana Balavegaya (SJB) pretended as if Perpetual Treasuries and CBSL didn’t commit the fraud, MP Weerasinghe said.

The CP man admitted that the SLPP suffered due to the absence of proper dialogue among constituents. The situation remained the same nearly two years after the 2019 presidential election, the MP said.



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Countrywide power outage act of sabotage, claim TU, officials

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Unions suspect sinister attempt to call in military

Engineers say technical fault caused power failure

CEBEU suspends work-to-rule protest

By Ifham Nizam

The government was trying to pin the blame for yesterday’s countrywide power outage on the Ceylon Electricity Board (CEB) trade unions in a bid to call in the military, Joint Trade Union Alliance Convener Ranjan Jayalal said yesterday.

Jayalal told The Island the government’s attempt would tarnish the image of the military and that of the country, but such intimidatory tactics would not deter the CEB unions from continuing with their action against the questionable agreement between the government and the US energy firm, New Fortress, which has been allowed to acquire a 40% stake in the Yugadanavi power plant. “The government is trying to derail our trade union action, scheduled for December 08. Definitely the power outage was an act of sabotage. Two units of the Norochcholai coal-fired power plant and the one at Sapugaskanda had failed,” he added, insisting that the trade unions had nothing do with the power outage. He said union activists had sprung into action to restore power despite their work-to-rule, for the sake of the country and its people.

A senior independent electrical engineer said the power failure was an act of sabotage or attempt at sabotage. “It could have been a rehearsal that misfired,” he added.

Electricity supply in several areas in Colombo and its suburbs were restored around 2.00 p.m. Subsequently, the power supply on Anuradhapura-Habarana, Laxapana-Athurugiriya and Kotmale-Biyagama transmission lines was restored. However, even at 5.30 p.m. most parts of the Gamapaha District experiencing power failures.

CEB General Manager, Eng. M R Ranatunga sand disruptions to the power supply could be considered sabotage. He said CEBEU activists had been dragging their feet on power restoration.

State Minister of National Security & Disaster Management Chamal Rajapaksa said necessary action would be taken against the CEB engineers if it was revealed that the power outage was an act of sabotage.

Major disruptions to the electricity supply were reported across the country around 11.30 a.m. yesterday owing to a breakdown in transmission lines.

The National Water Supply and Drainage Board (NWS&DB) said the water supply in several areas of Colombo and suburbs had been disrupted due to the breakdown in the power supply as the NWS&D is dependent on the national grid for pumping purposes.

The Ceylon Electricity Board Engineers Union (CEBEU) last night said it had received a favourable response from the government to its demands and therefore decided to suspend its work-to-rule campaign.

The Island learns that President’s Secretary Dr. P. B. Jayasundara will meet a CEBEU delegation, next week.

A senior electrical engineer expressed concern about CEB General Manager’s statement that the power outage was an act of sabotage by the engineers’ union. He denied as baseless the official’s claim.

CEBEU Secretary Dhammike Wimalarathne confirmed that his union had decided to suspend trade union action following an undertaking given by the government to have talks with them.

Meanwhile, CEBEU President Saumya Kumarawadu, addressing the media, yesterday, insisted that the power outage had been due to a technical problem.

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Chamal tells Parliament if power failure is due to sabotage, culprits will be dealt with severely

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By Saman Indrajith

Minister of Irrigation and State Minister of Internal Security, Home Affairs and Disaster Management, Chamal Rajapaksa told Parliament yesterday that the government was investigating the causes of yesterday’s countrywide power outage and if it was due to sabotage those responsible would be severely dealt with.

Responding to a question by Anuradhapura District SJB MP Rohana Bandara Dissanayake during the third reading stage debate on Budget 2022 under the expenditure heads of the Ministry of Defence, the Minister said that the government would not tolerate sabotage.

MP Rohana Bandara Dissanayake said that while the national security was being debated in Parliament the entire country was experiencing a power outage which could be considered a serious threat to national security.

He said all reservoirs were brimful and there was sufficient water to generate hydro power.

Colombo District SJB MP Dr. Harsha de Silva said that the entire country was in dark and Parliament was sitting thanks to power supplied by generators.

Minister Rajapaksa said that the government had already called for an investigation and it would not hesitate to take necessary action on the findings of the probe.

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Committee on Public Finance meeting: one-third drop in next Yala harvest predicted

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Members of the Committee on Public Finance recently recommended that if the import ban on rice, which was imposed last April, is to be lifted, it should be done only after a proper forecast of the coming Yala harvest.

The Chairman of the Committee on Finance Anura Priyadharshana Yapa pointed out that under the prevailing circumstances, the interest of the paddy farmers and consumers had to be taken into consideration.

In response to MP Yapa’s comment, the Imports and Exports Controller General revealed that, according to the available data, the expected Yala harvest is likely to be only 2/3 as compared to last year.

MP Nalin Fernando pointed out that if businessmen were allowed to import rice freely, the business community would be tempted to import more rice than necessary, driving the paddy prices down and affecting the farming community badly. Hence, the Ministry of Finance should intervene to prevent the local farmer from facing difficulties. MP Fernando also pointed out to the officials of the Ministry of Finance that it was important to make rice freely available at reasonable prices. Sri Lankans did not like rice imported from neighbouring countries, he said.

The Committee on Public Finance was urged to obtain approval for an Extraordinary Gazette Notification permitting the importation of Kekulu, Nadu, Samba and other types of rice as per the order of the Minister of Finance. MP Dr. Harsha de Silva said officials had to investigate the macro economic impact of such orders given without a proper procedural or logical assessment.

The committee members inquired from the officials of the Ministry of Finance who were present at the Committee meeting whether the 2021 Budget forecasts could be fulfilled. According to the statistics and data submitted by the officials of the Ministry of Finance, the committee observed that if only local funds were used to repay all debts, there would be an increase in interest rates in the near future and that would adversely affect the local private sector, (Dr.) Harsha de Silva said.

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